Talking Point: Tired of mere crumbs from the table

PETER HENNING, Mercury

December 2, 2016 12:10am

THERE are big lessons for Australia’s major political parties in Donald Trump’s victory in the US presidential election.

Will they take note?

There are similarities between the destruction of manufacturing in the US and Australia, the casualisation of labour, the driving down of wages, the impact of neoliberal free trade policies, industry and workplace policies, and the growing gap between rich and poor in income, home ownership and access to health and education.

Mainstream political parties are being abandoned across the Western world because they have lost touch with their constituencies, seen as more interested in power than policy or representing those who elected them. The rise of Right-wing political parties in Europe and elsewhere is a result of this, especially after European governments imposed austerity measures after the global financial crisis.

The GFC itself would have been less likely if deregulation of the financial industry in the 1990s had not occurred, removing constraints that had been in place for decades to prevent a repetition of the Great Depression of the 1930s.

The parallels with the early 1930s do not end there and should not be ignored.

Austerity measures in the wake of the Great Depression destroyed millions of jobs and created disillusionment with political establishments, most notably in Germany, where the Weimar Republic was swept away by Nazism. In the US at the time, President Roosevelt eschewed austerity in favour of job initiatives, a factor in US workers feeling they were politically represented.

Why did many nations respond to the GFC by imposing austerity measures similar to those that produced fascism in the 1930s? How could politicians be so stupid?

Most political careerists live in a short-term bubble and are poor students of history. Since the 1970s, taking their lead from Margaret Thatcher and Ronald Reagan, they have imbibed neoliberalism tenets as holy writ, essential doctrine to their career prospects in a world where to see the world differently is the way of the devil. This has defined Labor and Coalition politicians for more than 30 years.

Ironically, the success of Trump is a jolt to the holy writ of neoliberal orthodoxy in its key doctrine of free trade, the centrepiece of the neoliberal agenda since the Reagan-Thatcher years.

The irony lies in the fact Trump is the embodiment of neoliberal principles in practice, an employer who pays low wages and wealthy businessman who pays no federal taxes, but who has opportunistically blamed free trade policies for destroying US workers’ jobs, thereby garnering working-class votes to win key rust-belt states that usually supported Democrats.

Trade was paramount to Trump’s success, irrespective of his hypocrisy about representing worker interests, just as it was to the success of the Brexit campaign in the UK.

We need a different discussion about trade than the one we are having, one that challenges the prevailing political genuflection to free trade as a divine law. We need a debate that does not merely assert the benefits of free trade, with deals signed and sealed in secret, but one that is transparent. The reason is obvious. Free trade is raw capitalism without regulation, without control or civility, without humanity, negotiated without public consultation, and imposed. The model is not democratic, but authoritarian and designed to serve corporate interests.

Free trade deals negotiated by Australian governments in the past decade often included investor-state dispute settlement clauses, whereby corporations can sue in offshore courts if a nation passes laws against their interests, such as health, labour and environmental standards. Tobacco company Phillip Morris has already done this in relation to plain packaging laws, slugging the Australian taxpayer more than $50 million in court costs. Such arrangements, which make it possible for Australian laws to be challenged and potentially subverted, are attractive to Conservative governments. They keep wages low and offer a way to undermine existing laws protecting workplace standards and environmental controls, without the political difficulty of tackling the issues domestically.

In a political environment where neoliberalism is accepted largely without question, the analyses of free trade agreements get little or no attention. The Australia Institute’s conclusion, in November 2015, that “the current round of FTAs, including the Trans Pacific Partnership and the China-Australia Free Trade Agreement … are not in Australia’s national interest”, should be taken seriously.

We have only been told in the past couple of weeks, in an offhand way by Foreign Minister Julie Bishop, that there is another trade deal under way, called the Regional Comprehensive Economic Partnership, involving 16 nations, with China at its centre. According to the Australian Fair Trade and Investment Network, there is a push in some quarters for the RCEP to contain investor-state dispute settlement provisions, including corporate rights to sue governments in offshore courts, thereby circumventing Australia’s High Court.

Australians should be told about provisions likely to have socio-economic and environmental impacts.

The most important reason for transparency, apart from the quaint notion democracy cannot work without it, is that free trade historically favours the rich and powerful, and creates broad socio-economic dislocation without concern for human welfare.

Neoliberalism, as propagated since the 1980s, has created large inequalities everywhere it has been imposed, often producing divisions not seen since the 1930s. Where ISDS provisions and their precursors have been applied in recent decades to protect the interests of corporations, as in South America, dictators like Chile’s Pinochet have been enriched at massive social and environmental damage.

Last year The Australia Institute said Australia should debate the benefits and costs of each FTA, but added that “unfortunately the free trade debate in Australia has become meaningless and this has resulted in low levels of understanding and engagement by the public”.

In the first decade of the Australian Commonwealth, the concept of workers receiving a “fair and reasonable wage” was built into trade policy by the first Court of Conciliation and Arbitration in 1907, creating the minimum wage principle, meant to inhibit exploitation of labour and civilise capitalism.

If we fail to put the notion of commonwealth into trade policy, we will be unable to address the issue of growing inequality in Australia.